Dec 27, 2007 11:43 am US/Eastern
2007: The Fight To Lower Property Insurance
TALLAHASSEE, FL (CBS4) ―
Despite promises by Governor Charlie Crist, little progress was made in 2007 to persuade insurance companies to lower the rates they
charge home and business owners.
"Insurance companies have been "unfair, and possibly broken the
law, in carrying out their corporate duty to the people of our
state," Crist said, "I'm pretty torqued off at them, if you want to know the
truth."
Inexpensive insurance is almost impossible to find, especially in the Florida's coastal areas, despite legislation created last January during a special session designed to do just that.
Crist, who enjoys widespread approval ratings in polls, says he remains convinced that many insurance companies are gouging their customers.
"It's not a funny game," Crist said last July during a Cabinet
meeting. "They're not passing those savings on ... It's the law --
and there are consequences to not adhering to the law."
To compound the problem, many of the large national companies are reducing their stake in the state because of its high-risk environment.
Crist's rhetoric has worn on industry officials, especially since the state-backed Citizens Property Insurance Corp. has been allowed to expand its base at a significant risk to the state's coffers. If Citizens were unable to pay its claims, the state would be forced to make up the difference with an assessment on various types of insurance policies or use tax dollars to bail it out.
"Remember, politicians use the word 'assessment' in an attempt to cover up the more easily recognized word 'taxes,"' said Sam Miller, vice president of the Florida Insurance Council, a group that represents much of the industry. "We have been under siege from high level government officials for months since the rate relief that they promised hasn't been produced."
Miller, and some lawmakers, believe the state is playing Russian
Roulette with Citizens, which has some 1.3 million policyholders,
many of those who live in the high risk coastal areas of eastern
and South Florida.
"We just wonder why key public officials that are all over us also aren't concerned about that?" he said.
The state's fight to get the insurance companies to lower their rates has been going on all year.
In May, State Farm Insurance Co. agreed to pay almost $6.8 million to settle a class-action lawsuit by Florida policyholders who said the insurer unfairly depreciated claims for screen enclosures damaged in Hurricanes Katrina and Wilma.
In October, State Farm bowed to Florida regulators by agreeing to lower rates by an average of 9 percent, give refunds to make up for an overcharge, and make it easier for some car insurance customers to save money.
In November, state regulators rejected a homeowners' rate increase sought by four Allstate companies -- one of the large national companies reducing their stake in Florida -- and then subpoenaed company executives for a January hearing to explain why they want to boost premiums in the wake of record profits.
"We won't stop," Crist said. "We have to keep going."
The standoff between state regulators and private companies remains. That led Florida newspaper and broadcast editors to vote property insurance the state's No. 3 story for 2007.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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